How Olympic Endorsements Work In The Age Of #SponCon

For a hot second before, during, and after the Olympic Games, athletes are catapulted to celeb-level fame. Some become household names, others get turned into memes, and many gain enough followers on social media to be considered "influencers" and land sponsorships. In a lot of ways, being active on social media is part of the job; it allows athletes to engage with fans on a personal level, share behind-the-scenes glimpses of their training, and make a little money. And why wouldn’t they want to do that?

Well, #sponcon works a little differently when it's coming from an Olympian than when it comes from a former Bachelor contestant, a Kardashian, or just your run-of-the-mill influencer. That's because the International Olympic Committee (IOC) has a strict and controversial rule about what athletes can and can’t post. It's called Rule 40.

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Rule 40 is a bylaw in the Olympic Charter, the guiding principles of the IOC, and it states that before and during the Games, accredited people (athletes, coaches, officials, personnel, and media) can’t “commercialize their social and digital media and internet activity.” That means that, during this "blackout period," athletes aren’t allowed to mention their unofficial sponsors, promote other organizations or brands, or post anything that would imply that brands are somehow associated with the Olympic Games. And brands that aren’t official sponsors of the Games aren’t allowed to brag about their athletes who’ve made it to the Olympics, either.

In special situations, if athletes agreed to work with a brand sponsor during the blackout before they found out they made the Olympic team, they can submit a waiver to the IOC to keep those partnerships intact. But if they violate Rule 40 during the blackout period, which runs from February 1-28 this year, they can be expelled from the Games and stripped of their medals.

For Olympians cashing in on #sponcon, this presents a problem: Social media provides a unique platform for athletes to build their brand, earn money, and control the messages that they send to the world. It also allows them to profit off of smaller brands that they believe in, but may not have the chance to support within the context of Team USA. So this means that, during the blackout period — aka when a good chunk of the world is actually watching the Olympics and the Olympians — athletes are not allowed to cash in on the attention.

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Sound harsh? Originally, Rule 40 was added in 2011 so that the official Olympic sponsors, who pay millions to be part of the Games, wouldn’t have to deal with competition from smaller brands who were also supporting athletes. It also ensured that, during the Games and the time leading up to it, only the formal sponsors could use the Olympic imagery and terminology associated with the Games.

Then, in 2016 the IOC updated the rule so that athletes could seek sponsorships with unofficial brands; they just couldn't mention the Olympics (or anything vaguely related to the Games) during the blackout. According to the US Olympic Committee, this was done to "help athletes potentially generate additional financial support as they chase their Olympic dreams." Even so, Olympians still lose out on making a not-insignificant amount of money because of the restrictions in place.

“It would be one thing if, you know, [brands] were giving up the visibility, and the athletes were being compensated, but it's actually not the way the system is structured,” Sally Bergesen, the CEO of Oiselle (a women's running brand), told NPR during the Rio Olympics in 2016. “And so that's why you see so much tension around this rule.”

For many Olympic athletes, sponsorships aren't just icing on the cake — they're basically the whole cake. Other than prize money for winning competitions, sponsorships are their main source of income. If a Team USA athlete wins a medal at the Olympics, they can receive a bonus between $10,000 and $25,000 from the US Olympic Committee, according to Forbes. But everyone else just has to make do with the money that they get from sponsors.

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Few athletes have publicly spoken out against Rule 40, but many have found ways to acknowledge it without burning bridges. This year, right before the blackout period for the Olympic Winter Games in PyeongChang, many athletes posted a “thank you” to their sponsors on social media.

Maddie Mastro called out this rule in her caption, saying, “this is 4 u rule 40.” On the eve of the blackout, Olympic bobsledder Elana Meyers Taylor tweeted: “Today's the last day before @pyeongchang2018 that I can shout out my sponsors for the support they've provided me to help me get where here. Thank you @CocaCola @Deloitte @Bridgestone @BMWUSA @comcast @ProcterGamble @24hourfitness - now's the moment we've waited for- let's go!” Technically, all of those brands that Meyers listed are official sponsors of the Olympics, while Mastro’s are unofficial. During the blackout, you may see advertisements featuring Meyers — but she can’t post the same promotion on her personal accounts. Mastro and the brands she partners with have to stay silent.

In the past, some brands have tried to work around the rule with coy advertisements that acknowledge the Games without explicitly referencing the Olympics or the host city. For example, on social media Oiselle referred to the Summer Olympics in Rio as “a Big Event in the Southern Hemisphere” or “a city that rhymes with Neo Bee Sin Arrow.”

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Other brands have taken a more guerrilla approach, and have given athletes products in hopes that they’ll be seen or photographed with them while training. At the London Olympics in 2012, Beats by Dre gifted headphones to a few top athletes, including Michael Phelps, which caused a lot of ruckus because the brand wasn't an official sponsor. The IOC has a dress code that the athletes have to follow during the Games, but the headphones circumvented those rules. The IOC responded to this scandal by establishing new rules about what they call “ambush marketing.”

Interestingly, Beats’ competitor Bose is the official sponsor of the US Ski and Snowboard Team this year. But last month, downhill skier Lindsey Vonn, who has 1.3 million followers on Instagram, shared an Instagram post sponsored by Beats. Several other skiers and snowboarders, like Jamie Anderson and Shaun White, were featured in a similar Beats by Dre promotional video on social media. When we reached out to Beats, they explained that these athletes are part of "the Beats family" and were highlighted as part of a special campaign that features the world's most adventurous and ambitious athletes in winter sports.

For the most part, the amount of money that athletes get from these deals is under wraps. The brands we reached out to for this piece were unable to provide details about deals with athletes. In general, when companies price out a rate for a sponsored Instagram post, they look at who the followers are, seasonality, engagement rate, and so on, explains Reesa Lake, executive vice president of Digital Brand Architects, an influencer agency. “Usage and exclusivity exponentially increase the rate for posts as it locks the talent out from working with other brands,” she says. Rates for a single post can range from $2,500 to $5,000 for someone with 100k followers to $7,500 to $20k for talent with a million followers, she says.

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Olympians seem to be in a league of their own when it comes to sponcon rates. Bergesen estimated in a 2016 blog post that it cost Oiselle (an unofficial sponsor) around "$300K over a four-year period to develop an athlete" for the Olympics. Official Olympic partnerships, on the other hand, can result in brands shelling out upwards of $200 million for four years, according to Forbes. While it's not clear exactly how much of that ends up with athletes, there seems to be more money involved when companies have a stake in the Games.

To give you a sense of the scale we're talking about: After the London Olympics, Missy Franklin reportedly turned down $5 million worth of endorsements in order to go back to school. And Michael Phelps received a $1 million bonus from Speedo, an unofficial sponsor, after winning eight gold medals in Beijing (which he donated to charity).

That doesn't mean that all Olympic athletes get the same payout, though. The athletes who get to align with the official Olympic-sponsored brands — like Hershey, Coca-Cola, P&G, Smuckers, and Samsung — are usually the most famous. For example, this year Vonn starred in a paper towel commercial for Bounty, and freestyle skier Gus Kenworthy was featured in a commercial for Head & Shoulders — two brands that are owned by P&G. Meyers Taylor has used Instagram to post several #ads for Xfinity and Pantene. Lesser-known Olympians, however, have to find outside sources of income by aligning with smaller, unofficial brands outside of the blackout period, when they likely can't command as much money.

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In the age of social media and #sponcon, athletes have more opportunities to diversify their income than ever — but, thanks to Rule 40, they're not allowed to fully take advantage of those opportunities. Is it time that the IOC finds a new solution, one that gives official advertisers the premium placement they pay for while also allowing athletes to cash in on their often-fleeting influence?

Figuring that out may sound like an impossible task. But if Instagram has taught us anything it's that the world has Olympian-level endurance for double-tapping on #sponcon.

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